Comprehensive Report: Three Strategic Models for Business Development

This report provides a comprehensive analysis of three critical strategic models used in business: Pestle Analysis, Porter's Five Forces Model, and the Input/Output Model. The Pestle Analysis examines the impact of external factors, including political, economic, social, technological, legal, and environmental influences on a business. Porter's Five Forces Model is utilized to assess the competitive landscape, focusing on factors like competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entry. The Input/Output Model is a quantitative technique that illustrates the interdependencies between different sectors within a national economy, highlighting how the output of one industry can serve as the input for another. The report discusses the application of these models, providing insights into how businesses can leverage them to gain a competitive advantage, understand market dynamics, and make informed strategic decisions.

THE MAIN THREE
STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Strategic Models contains plan of action or design to improve process of entity. Many
organisations use these models for meeting goals and operations of business. In this report it will
cover three strategies which are input output model, Pestle analysis and Porter’s Five Forces
Model. Pestle Analysis is helpful for analysing impact of external factors on business. This tool
is used when there is need to launch a new project. It includes Political, Economic issues and
many more. It also covers Porter’s five forces Model. This is a way from which this tool is used
for understanding competitive business environment and recognising of potential profitability.
MAIN BODY
PESTLE Analysis
It is a tool which is used for reviewing of various factors like Political, Economical,
Technological and many more. This helps any type of business to take benefit of opportunities
which are present in market (Collie and et.al.,2016).
Political Factor- this factor refers to how government is interfered in economy. In this
factor involves changes made by government policies for trading, Internal and political issues.
Some other factors are also discussed under this are foreign trade policies, labour laws, trade
restrictions, tax policy and many more. It impacts on business and reaction on changes in current
and future regulations. This factor impact on business if any change in law which effect working
criteria.
Economical Factor - this refers to organisation has effect on business with profitability
position of entity. The factors included under this are economic growth, income level of
consumer, interest rate, exchange rate, inflation rate and many more. It will affect business in
terms of profitability. Factors are also divided in two parts; macro and micro. Macro factors or
issues which is not governable inside enterprise areas and Micro are controllable and impact
business in somewhat in small manner. Like if inflation rate goes high which affects business in
every aspect. All income level consumer will not able to buy product due to increase in prices. It
is affecting on its profitability position of business.
Social Factor - it refers to common impression and attitude of people. This factor
includes changes in age, gender, attitude, education level, population growth, health conscious.
All these factors affect business directly. This is due to marketers who understands demand of
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customer. By making image in front of customer and society recognition of product will be
increased. It is helping business in every aspect like profitability, brand value of business,
chances of survival of product in market etc. (Corley, 2017).
Technological Factor - this factor refers to changes in technology which are affecting
business. In this factor use of the latest technology in business which makes work easier. It will
decrease time of doing work in manual way which will make sure that business is using smart
techniques. These changes affect business in every way like any of enterprise is using outdated
technology which affects operation of entity. It is working with motive of performing of work in
a smarter way. This affects marketing as well as manufacturing of goods. This is one way by
which entity is doing work in advanced way and through this entity has compiled its work on
time.
Legal Factor- this factor means changes regarding laws which affects business like
product safety, labelling, health security, advertising standards and consumer laws. While doing
its business company must know how to trade ethically. As different types of entity are trading
globally now it becomes risky due to rules of various countries are diverse regarding to trade.
(Crawford, 2016).
Environmental Factor- this factor means preservation of environment while doing its
business. It is now becoming compulsory to organisation to follow CSR activities while
performing operations of business. This factor is very significant due to carbon footprints,
pollution targets, scarcity of raw material etc. By following this factor brand value of entity will
increase.
Porter’s Five Forces Model
This model was introduced by Michael Porter in 1979 which help in making industry
attractiveness and profitability of business. It is used by enterprise for monitoring of rivals of
commercial enterprise and their impact on business concern.
Competitive rivalry - in this business has to find out about strong and weak points of
contenders which affects organisation. Competitors of business are the biggest danger for entity
like lowering of prices by contenders impacts on business by decreasing sales of entity which
ultimately affects profitability position of industry. If there are fewer competitors in industry,
then position of business and profit both will increase. For example, in telecommunication sector
competition is low as compared to other sector so chances of threat of rivalry are low but in
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cosmetic sector there are lot of competitors which can weaken position of entity (Demil, Lecocq,
Ricartand Zott, 2015).
Supplier Power- Supplier are main part of business and responsible for providing raw
material in business. When there is increase in prices by supplier which affects entity and which
will increase its cost of business. Entity must maintain long term relationship with supplier so
that cost of entity will be charged less. If entity has not maintained relationship with supplier in
that case company has to find out its new supplier which can charge more from other and its
impact on profit.
Buyer Power- all products are made by entity to attract buyers because consumer is main
part of market. Marketers are making product for fulfilling demand of consumer. Customers has
full power which influences organisation to produce goods which are recognisable in market.
Threat of substitution- there are many products which are available in market with
similar goods. Prices of one good is higher than customers will shift to another substitute for
satisfying their need. By having many substitutions of product in market which impacts on brand
value of company which weakens its position in market. For example, Arial and Tide are
substitutes if prices of one increases then consumer will shift to another brand. This will decrease
customer base of entity (Elmes, and Barry, 2017).
Threat of new entry- In this there are always threat of new entity entering in market. If
position of business is very much strong in market, then there will be no threat. For example, in
telecommunication sector there are already many competitors present in market and by entry of
new firm in this sector cause a threat to cited entity as well as remaining companies.
Input and Output Model
This is a Quantitative technique which tells that there is interdependency between different
branches of national economy. This was introduced by Wassily Leontief in 1906-1999 for which
he was awarded Nobel Prize in Economics. This model tells inter industry relations within an
economy. This tells that finished material of one product can be used as input of other. Like in
inter industry matrix one side is row and other side is column (Jamali and Jain, 2017.). This
model is of linear nature which computes effects of changes in demand. The structure of this
model has been launched into national accounting in developed countries which is used to
measure GDP. Analysis of this model is to measure economic effects of events of public
investments or programs shown by IMPLAN and Regional input output Modelling System. This
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is used to find out economic related industry cluster and also called "target" industries. This is
use in making Socialist planned economy. It is used to determine physical quantities which is
produced in industry and utilised to make economic plan of resource allocation.
CONCLUSION
From this report it has been concluded that in above essay the discussion of three main
strategies has been made. One is PESTLE Analysis, Porter’s Five Forces Model and Input/output
model. Porter five forces is used to identify diverse nature of contenders in business which
affects operation of enterprise. This is used to gain competitive advantage of firm. Pestle
Analysis was done with motive of determining stability of business in particular nation which
has different laws. Input output model is a tool which help in determining that output of one
industry can be utilized by other one. This shows that there is interdependency of one sector over
another.
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REFERENCES
Books and Journals
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Corley, H. W., 2017. Normative Utility Models for Pareto Scalar Equilibria in n-Person, Semi-
Cooperative Games in Strategic Form. Theoretical Economics Letters. 7(06). p.1667.
Crawford, V. P., 2016. New directions for modelling strategic behaviour: Game-theoretic models
of communication, coordination, and cooperation in economic relationships. Journal of
Economic Perspectives. 30(4). pp.131-50.
Demil, B., Lecocq, X., Ricart, J. E. and Zott, C., 2015. Introduction to the SEJ special issue on
business models: business models within the domain of strategic
entrepreneurship. Strategic Entrepreneurship Journal. 9(1). pp.1-11.
Elmes, M. and Barry, D., 2017. Strategy retold: Toward a narrative view of strategic discourse.
In The Aesthetic Turn in Management (pp. 39-62). Routledge.
Eomnicki, A., 2018. Population ecology from the individual perspective. In Individual-based
models and approaches in ecology (pp. 23-37). Chapman and Hall/CRC.
Jamali, D. and Jain, T., 2017. Strategic approaches to corporate social responsibility: A
comparative study of India and the Arab world. In Development-Oriented Corporate
Social Responsibility: Volume 2 (pp. 85-104). Routledge.
Koschker, S. and Möst, D., 2016. Perfect competition vs. strategic behaviour models to derive
electricity prices and the influence of renewables on market power. OR spectrum.38(3).
pp.661-686.
Silvi, R., Bartolini, M., Raffoni, A. and Visani, F., 2015. The practice of strategic performance
measurement systems: Models, drivers and information effectiveness. International
Journal of Productivity and Performance Management. 64(2). pp.194-227.
Plagányi, É. E and et.al., 2014. Multispecies fisheries management and conservation: tactical
applications using models of intermediate complexity. Fish and Fisheries. 15(1). pp.1-
22.
Sahebi, H., Nickel, S. and Ashayeri, J., 2014. Strategic and tactical mathematical programming
models within the crude oil supply chain context—A review. Computers & Chemical
Engineering. 68. pp.56-77.
Sandberg, S and et.al., 2015. Defining analytical performance specifications: consensus
statement from the 1st Strategic Conference of the European Federation of Clinical
Chemistry and Laboratory Medicine. Clinical Chemistry and Laboratory Medicine
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